Overview
Forecasting is the application of time series analysis to predict future events. It is a critical tool for planning and decision-making in business, finance, and government.
Common Methods
- Qualitative: Based on expert opinion and judgment.
- Quantitative: Based on mathematical models and historical data (e.g., Exponential Smoothing, ARIMA).
Accuracy
Forecasting is rarely 100% accurate. Accuracy is typically measured using metrics like Mean Absolute Error (MAE) or Root Mean Square Error (RMSE).